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The Impact of Historically High Gold Prices on the Rare Coin Market
May 6, 2025
Coin dealer Don Kagin and CoinWeek editor Charles Morgan discuss the impact that the historically high price of gold is having on the rare coin market. At the time of this conversation, the gold spot price was over $3,200 an ounce, and many coin dealers reported that they were net buyers. In this market, what are the premiums being paid for semi-common and common pre-1933 United States gold coins? Charles and Don discuss this.
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0:09
so Don before I let you go u I'd like to
0:12
switch gears And maybe you're not
0:14
prepared to talk about this and if and
0:15
if if you can't we can cut this out Um
0:18
but uh I wanted to talk to you about um
0:21
what's going on with the uh the gold
0:23
bullion market and and how maybe $3,200
0:28
gold is impacting your program with the
0:31
Spanish mint Do you find that there's
0:33
challenges involved with bullion being
0:36
this high Do you see collector behavior
0:39
uh changing because of where bullion is
0:41
or you know what what what is going on
0:43
with that Is that affecting your
0:46
business with your uh with your bullion
0:48
program
0:51
Yes And it's affecting the entire modern
0:56
proof collectible market
0:59
Um you're the good news bad news The
1:02
good news is that gold's gone way up and
1:04
all of the clients who have bought
1:05
anything are very very happy Right
1:08
The unfortunate thing is that when that
1:10
happens and it doesn't happen very often
1:13
especially not soaring the way it has uh
1:16
the price of gold So but it it it
1:19
crushes the margins over gold that one
1:24
is willing to pay because you don't know
1:27
what will happen on a day-to-day basis
1:30
And and while the the the Spanish
1:34
government who provides the coins to us
1:36
and at a certain percentage over gold
1:39
that we have to pay are very sensitive
1:42
are sensitive to that and have given us
1:45
lower the prices a little bit But they
1:47
have to remember
1:50
um the all the Spanish gold coins that
1:53
were the exclusive distributor for are
1:56
proofs of limited quantities So when we
2:00
were at the mint and giving them a
2:02
couple
2:03
pointers on how to handle the the
2:06
coins they uh they literally have a a
2:10
person there that is taking one coin
2:13
putting in the collar striking it taking
2:15
it out Another person gets rid of all
2:18
the the the dirt whatever the in in the
2:21
air that they can only do a 350 or so
2:25
coins a day right rather than the
2:29
bullion American Eagles or whatever that
2:31
are being churned out in tens of
2:33
thousands or more right So they have a
2:35
cost that's a little bit higher than a
2:38
cost of a normal bullion coin So where a
2:41
number of our clients bought the
2:44
Spanish coins primarily as a bullion
2:48
item and they were you know favorably
2:52
priced at the before they're not so much
2:56
now they have come down the premiums
2:59
have come down but uh you know you can
3:02
buy krugaran today for for melt or very
3:06
close I mean but the costs involve once
3:09
again are are much higher for a proof
3:12
limited quantity coin as these are So it
3:14
has impacted that still we have people
3:18
that want to own one of these beautiful
3:21
reverse proofs gold coins Um I had
3:25
somebody who wanted to buy a bullion
3:28
coin I gave them an option of a krugaran
3:31
an American
3:32
eagle and the Spanish bullion coin Right
3:36
They're little bit They took the Spanish
3:38
bullion coin because it has that
3:41
anti-counterfeiting device that no other
3:43
coin has It's like a hologram on the
3:47
back of the coin So there are bullion
3:51
people buying up for that but mostly the
3:52
people that are buying it have already
3:54
bought other Spanish gold coins or find
3:57
it cool So but it has impacted our
3:59
business
4:00
there Excuse me We may be doing
4:05
um a silver proof issue uh early next
4:09
year though that's uh that has a
4:12
relationship with the US the United
4:14
States and it's 250 year
4:21
anniversary excuse me well I of I often
4:23
wondered you know back back uh if we go
4:26
back five or 10 years and uh you know
4:28
some of the hard money advocates within
4:31
our industry you
4:32
projecting you know big numbers for gold
4:35
and silver like what the uh
4:37
ramifications would be for those numbers
4:39
actually being reached for the uh the
4:41
the the type of person who's our typical
4:43
buyer And uh I I always assume that like
4:47
if gold reached a certain level you'd
4:49
see more institutional buying and
4:50
selling than you know the individual who
4:54
you know will go to their local coin
4:55
shop and buy an ounce of gold every
4:57
couple months or you know stack silver
5:00
coins you know cuz I I I just felt like
5:02
for a for a numismatic industry that is
5:06
looking for you know some margin on you
5:10
know pre33 gold coins or is selling the
5:13
modern bullion in coins as collectibles
5:16
that there is a goldilock zone for what
5:19
that metal can cost for it to be a
5:21
profitable business where you're turning
5:23
off over turning over enough inventory
5:25
and then once you got past that level
5:27
you're sort of pricing the product out
5:29
So do you feel like that there is truth
5:33
to that that worry on mine that there is
5:35
a a zone in which like you start to
5:38
see you know lower market participation
5:42
because of cost and if it you know if
5:45
gold goes up to 4,000 then that that
5:47
opens up another set of challenges for
5:49
uh for like modern uh mintmade uh coins
5:55
Well I I think so Uh I think volatility
5:59
has a lot to do with it too If it was
6:01
stable
6:02
uh if gold was stable at the 33 $400
6:06
level for a while you know I I think the
6:09
margins will will come back a little
6:11
People feel more comfortable Um you know
6:15
it's only 10% not of my business I mean
6:18
I'm a vintage coin dealer and currency
6:21
dealer and and um you know I I I got
6:25
into the serendipously Um I wasn't
6:28
looking for getting involved in this but
6:30
I tell you that the coin market itself
6:33
seems to be pretty good for for good
6:36
items that are hard to find you know um
6:39
and good quality and fresh material are
6:42
are selling well today So so um I don't
6:46
worry so much about oh my gosh what
6:48
would happen if gold was four five
6:50
$6,000 an ounce What would it do I don't
6:53
know I I did not predict that it would
6:56
be so high I didn't know that central
6:58
banks you know maybe China's trying to
7:01
amass enough gold to to have their own
7:05
uh currency replace the dollar in the
7:07
world I I don't know if that's uh
7:10
causing this to go up or whatever Um I
7:13
just
7:14
uh I'm just there in the market to help
7:17
facilitate people buying and selling it
7:20
Well I figured you'd be in a unique
7:21
position to talk about it since you like
7:23
you said 90% of your business isn't
7:26
bullion but in recent years you've been
7:28
you've been interfacing with that side
7:30
of the market You don't necessarily
7:31
depend on it but you are you you are
7:34
subject to the whims of the market in
7:36
that respect And and I know you're
7:38
building a a program that does have
7:40
meaning for you So I appreciate your
7:42
insights on that I was really curious I
7:44
mean I've been talking to several bigger
7:46
wholesale guys and and they they seem to
7:49
be net buyers I think at this point of
7:52
uh of gold you know and and one of them
7:54
commented uh a pretty prominent guy said
7:58
that uh you know one of his guys went to
8:00
the counter you know someone was
8:02
bringing in gold wrote a check for
8:04
$100,000 and he came back and said
8:06
"Here's what we bought." and he says
8:08
"Wow these stacks seem to like they're
8:10
getting smaller and smaller lately."
8:13
Yeah Well that's that's the case when
8:15
the the commodities higher and higher Um
8:19
but I I don't see gold
8:23
um demand in the long run going down I
8:27
think it's going to continue to go up
8:29
especially if we have volatile times in
8:32
the future uh there's still a lot of
8:35
people who who appreciate gold uh for
8:40
all the benefits it gives and we're not
8:42
leaving that business but uh yet it has
8:45
impacted uh with the price of gold going
8:48
up so far so fast
8:51
Well I think on that po I think on that
8:53
point you're you're you're probably
8:55
absolutely right I think it I think it
8:57
is volatility which means that it's
8:59
muscle memory So if you have in your
9:01
mind the idea that gold's $1,800
9:04
$2,000 you're not gonna you're not going
9:06
to be so sure about $3,200 But if all
9:10
you see is $3,200 for the next two or
9:12
three years then then that changes your
9:15
psychology about purchasing the asset So
9:17
I I I take your point I think you're
9:19
absolutely on to something with that
9:23
Yeah Well again my guess is as good as
9:27
yours or or probably not as good but you
9:30
know well if we're all good prostic
9:33
prognosticators we'd all be billionaires
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